GRENKE AG, a Germany-based financier for small and medium-sized enterprises, reported a net profit of €20.1m (-24 per cent compared to Q3 2020: €26.5m) in the third quarter of 2021.

Grenke posted €32.3m in the first half of 2021.

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Due to the Covid pandemic, new business has declined in recent quarters, resulting in a year-on-year decrease in net interest income of €8.8m to €90.8m in the third quarter of 2021. The stable payment behaviour of customers led to a reduction of settlement of claims and risk provision from €47.4m to €37.3m. The resulting loss rate amounted to 1.7 per cent in the third quarter of 2021 (Q3 20201: 2.1 per cent).

In its report for Q1 2021, Grenke announced that costs were expected to increase slightly over the year due to the after-effects of the audits and the ongoing implementation of measures arising from critical reports about the company’s operations which culminated in a series of boardroom departures and resignations.   

Costs increased quarter-on-quarter accordingly by €7.7m, mainly due to higher staff, administrative and IT project costs. The ratio of expenses to income, or cost-income ratio, was 51.2 per cent in the third quarter (Q3 20201: 40.5 per cent) and thus rose slightly above the target of below 50 per cent for the year as a whole. 

Total assets amounted to €6.8bn as of 30 September 2021 reporting date (31 December 2020: €7.3bn). As a result of the lower volume of new business in recent quarters, the largest balance sheet item – non-current and current lease receivables – fell by 9.1 per cent to €5.1bn as of the reporting date (31 December 2020: €5.6bn). Liquidity equalled €1bn as of 30 September 2021 (31 December 2020: €0.9bn). The equity ratio amounted to 18.1 per cent and thus remained above the minimum target of 16 per cent set by the Company.

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Sebastian Hirsch, CFO of Grenke AG: “We have regained our footing in recent months because we have tackled changes quickly in addition to having stable liquidity. We have increased our earnings guidance for the 2021 financial year not only because of the capital gain from the sale of the via fintech investment but also as a result of the strong contribution margins of our business and normalisation of risk costs, despite continuing macroeconomic uncertainties.”

The quarterly statement for Q1 and Q1-Q3 of 2021 is available online at  https://www.grenke.com/investor-relations/reports-and-presentations.